COAL OF AFRICA LIMITED - Soutpansberg Deferred Consideration amendment agreement signed

Soutpansberg Deferred Consideration amendment agreement signed

Coal of Africa Limited
(Incorporated and registered in Australia)
Registration number ABN 008 905 388
ISIN AU000000CZA6
JSE/ASX/AIM share code: CZA
("CoAL or the "Company" or the "Group")



ANNOUNCEMENT                                                            12 May 2015

Soutpansberg Deferred Consideration amendment agreement signed


Coal of Africa Limited (the “Company“ or “CoAL”) is pleased to announce that it has reached an
agreement (the “Amendment Agreement”) with Rio Tinto Minerals Development Limited (“Rio Tinto”)
and Kwezi Mining Proprietary Limited (“Kwezi”, together with Rio Tinto, “the Sellers”) regarding the
deferred   consideration   payable   by   CoAL’s    subsidiary,   MbeuYashu     Proprietary   Limited
(“MbeuYashu”), to the Sellers in connection with its acquisition of the Chapudi Coal assets (part of
the Greater Soutpansberg Project).


During 2010, CoAL acquired the shares and shareholders claims held by the Sellers in both
Chapudi Coal (Proprietary) Limited (“Chapudi”) and Kwezi Mining and Exploration (Proprietary)
Limited (“KME”). Chapudi and KME hold the prospecting rights for the Chapudi Coal Project and
related exploration properties in South Africa’s Soutpansberg coalfield in the province of Limpopo
(collectively, the “Chapudi Coal Assets”). The full acquisition price for the asset was US$75 million
of which US$30 million was subject to a deferred consideration agreement. To date, CoAL has
settled an additional US$8 million of the deferred consideration and the Amendment Agreement
outlines the agreed repayment terms for the remaining US$22 million.


Salient features contained in the Amendment Agreement include:
   -   Minimum monthly payments of US$100,000.
   -   Full and final settlement of the outstanding purchase price plus all accrued interest on 15
       June 2017.
   -   Interest accrued on the outstanding balance at 4% per annum, and
   -   Certain mandatory payments have been stipulated in the agreement and these are linked to
       the completion of the third stage of the communicated Equity Raise, the completion of the
       sale of Mooiplaats and the disposal of other non-core assets.


Together with the Amendment Agreement, the company has entered into security documents with
the Sellers pursuant to which CoAL has granted security in the form of a first ranking pledge over
the shares held by CoAL in MbeuYashu, the holding company of Chapudi and KME. CoAL is the
effective owner of 74% of the shares in Chapudi and KME.


David Brown, Chief Executive Officer of CoAL, commented: “This was the last of the historic liability
issues and this agreement provides certainty of outcome as well as providing CoAL with flexibility. I
would like to thank all parties for their co-operation in realising a solution”.


Authorised by
David Brown
Chief Executive Officer
12 May 2015


For more information contact:
David Brown                                                    Chief Executive Officer                              Coal of Africa                   +27 10 003 8000
Celeste Harris                                                 Investor Relations                                   Coal of Africa                   +27 10 003 8000
Tony Bevan                                                     Company Secretary                                    Endeavour Corporate Services     +61 08 9316 9100

Company advisors:
Jos Simson/Emily Fenton                                        Financial PR (United Kingdom)                        Tavistock                      +44 20 7920 3150
Chris Sim/George Price/Jeremy Ellis                            Nominated Adviser                                    Investec Bank plc              +44 20 7597 5970
Charmane Russell/Jane Kamau                                    Financial PR (South Africa)                          Russell & Associates           +27 11 880 3924 or
                                                                                                                                                   +27 82 372 5816
Investec Bank Limited is the nominated JSE Sponsor

About CoAL:
CoAL is an AIM/ASX/JSE listed coal exploration, development and mining company operating in South Africa. CoAL’s key projects include the Vele
Colliery (coking and thermal coal), the Greater Soutpansberg Project /MbeuYashu, including CoAL’s Makhado Project (coking and thermal coal).

AU: Coal of Africa Limited, Suite 8, 7 The Esplanade, Mount Pleasant, Perth WA 6153, Australia, Tel: +61 8 9316 9100, Fax: +61 8 9316 5475
ZA: South Block, Summercon Office Park, Cnr Rockery Lane and Sunset Avenue, Lonehill, 2191, Tel: +27 10 003 8000 Fax: +27 11 388 8333 Email: adminza@coalofafrica.com

Bernard R. Pryor – Chairman, David H. Brown – Chief Executive Officer
Non-executive directors: Peter G. Cordin, Andrew D Mifflin, Khomotso B. Mosehla ,Thabo F Mosololi, Rudolph H. Torlage




                                                                                                                                                                  

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